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A streetcar passes through the Urban Center Plaza at Portland State University. The city of Portland has designated money for streetcar tracks in the PSU area, but funding for some of the college's other plans is in limbo because of the proposed shutdown of the education urban renewal area. (Thomas Boyd, The Oregonian)

Portland's various urban renewal districts are more than a bit Byzantine. Like the ancient empire, at times they can be rather difficult to manage effectively. So, taken at face value, Mayor Charlie Hales' push "to get urban renewal back to its valid purpose" after a period of rule-bending makes sense.

But unwinding an empire – and it's not a stretch to say that's what Portland's urban renewal districts have evolved into – always carries the risk of unintended consequences. Welcome to the realm of Portland State University, which could see some efforts to expand important programs derailed if the mayor carries through on plans to pull the plug on the so-called education urban renewal area in downtown Portland.

In a phone interview with The Oregonian editorial board, Hales criticized previous City Councils for "using urban renewal as an ATM" and "stretching at the very least the intended purpose of urban renewal." Hales proposes to eliminate the education and Willamette renewal areas, shrink two others and expand two near downtown – the Central Eastside and North Macadam districts. He envisions partially easing PSU's pain by working some of the university's projects into the revised North Macadam districts.

The plan has potential. Any effort to simplify city government should be welcomed after four years of elaborate schemes, not all of which became reality, under Mayor Sam Adams. But if the city continues down this path, Hales must show discipline in choosing which projects to pursue – regardless of funding mechanism. About 15 months into his term, results are mixed. Selling the Water House was a good sign. Ongoing efforts to land a subsidized Trader Joe's in a North Portland neighborhood with greater needs are puzzling. Tapping $1.2 million of urban renewal money for streetcar tracks near PSU before announcing changes to urban renewal districts raises questions about priorities.

If revamping urban renewal is simply one way to transition from Adams' "urban renewal" to-do list to Hales' "place-making" agenda, then it won't accomplish much. If it represents a commitment to sound fiscal management, everyone should applaud. Among the benefits of the proposed urban renewal changes: a projected $106.2 million in taxes returned to school districts and local governments over the next 30 years. That money could be used for core government responsibilities such as maintaining parks, expanding career and technical education and improving services for the mentally ill, Hales said.

But the needs that led Adams to push for the education district, with PSU as its centerpiece, still exist. Portland State occupies a unique and critical role in the state's ambitious goals to increase to 40 percent the number of adult Oregonians with four-year degrees. Located in the state's largest city and easily accessible by mass transit, PSU enables thousands of students to get a degree while living at home – significantly reducing costs. Its urban location also helps foster relations with businesses, and more than half the money expected from the urban renewal area was targeted for programs that enhance those relationships.Regardless of Hales' goals, Portland State finds itself caught in the middle. Even those who supported creation of the education district generally acknowledged that it required a bit of "stretching" to justify the area as one that met all the technical requirements for urban renewal. A tax ruling issued since the district was created raised questions about what PSU can and can't do with urban renewal money.

The education district also included an affordable housing set-aside of more than $46 million, creating another hole that the city will need to fill in some way.

Portland State and the Portland Development Commission are discussing ways to achieve some of the original goals through the North Macadam district expansion, The Oregonian's Brad Schmidt reported. As those negotiations progress, priority should be given to projects that increase access to academic programs, such as improved science facilities, and/or help connect students with career opportunities, such as enhancements to the PSU Business Accelerator.

If the mayor and City Council do their homework, these changes can write a new and productive chapter in Portland economic development. And administrators at PSU aren't the only constituents who will be waiting to grade the work when the council finishes.